A Careers Perspective on Entrepreneurship

[Excerpt] What if being an entrepreneur were treated like any other occupation—teacher, nurse, manager? What if the decision to found a new venture were thought of as one of many options that individuals consider as they try to structure a meaningful and rewarding career? How would the field of entrepreneurship research be different? In our view, there is much to be learned by conceiving of entrepreneurship not solely as a final destination, but as a step along a career trajectory. Doing so opens the study of entrepreneurship to a wider range of scholarly insights, and promises important insights for entrepreneurial practice, training, and policy. This special issue takes an important step in this direction

Founder Replacement and Startup Performance

We provide causal evidence that venture capitalists (VCs) improve the performance of their portfolio companies by replacing founders. Using a database of venture capital financings augmented with hand-collected founder turnover events, we exploit shocks to the supply of outside executives via 14 states’ changes to non-compete laws from 1995 to 2016. Naive regressions of startup performance on replacement suggest a negative correlation that may reflect negative selection. Indeed, instrumented regressions reverse the sign of this effect, suggesting that founder replacement instead improves performance. The evidence points to the replacement of founders as a specific mechanism by which VCs add value

Connecting with the Entrepreneurial Ecosystem

The TTO Circle organised a workshop ‘Connecting with the Entrepreneurial Ecosystem’, which took take place in Brussels on 24 October 2019. The workshop dealt with the challenges connected to establishing spin-off companies from RTOs: Complementing spin-offs´ technological/scientific existing talent with CEO and sales profiles interested in growing SMEs. Having well-rounded teams made up of ‘minds’ and ‘management’ is a necessary condition to entice smart capital into investing in these opportunities. The lack of evidence on the adequate formula to systematise this process of connecting with entrepreneurs might hinder the future success of the deep-tech spin-offs. Finding a connection with entrepreneurs involves complex issues concerning venture building, incentive setting, etc. The workshop, thus, aimed to stimulate discussions around the challenges and opportunities. The report highlights the main insights from the workshop related to the matching of ‘minds’ and ‘management’. First, from the micro perspective, it discusses the issues around the formation of venture teams and the incentive setting for forming teams that can launch spin-offs. Second, from the macro perspective, it analyses the role of the different agents in the ecosystem in fostering interactions and connections between minds and management. These conclusions aim to fit within a broader policy debate on how to facilitate the formation of scale-up ventures in Europe. In fact, discussions about a lack of financing, particularly for early-stage ventures, point to the discouragement of investors due to the lack of solid and well-rounded teams. Thus, this issue of connecting with entrepreneurial talent is also linked to the general financing issue.JRC.I.4-Intellectual Property and Technology Transfe

The Relationship between Successor, Planning Characteristics, and the Transfer Process on Post-Transfer Profitability in SMEs

The aim of this study is to examine the relationship between successor characteristics, transfer planning characteristics and post-transfer profitability within Dutch SMEs. On the one hand, based on the resource dependency view, it is assumed that successors with more knowledge and experience, derived from work experience from outside the target firm, will be able to extract higher rents from the firm than those with less (diverse) work experience. On the other hand, based on the knowledge management literature, and in particular, concepts such as tacit knowledge, this research makes the contrasting prediction that post-transfer profitability is likely to be higher in firms where the successor is an insider and is related to the predecessor. Moreover, this paper proposes, based on the theory of planned behaviour, that written plan and strategic intent have a positive association with post-transfer profitability. The study is based on quantitative analysis of a random sample of Dutch SMEs. Initial results from the current study suggest that determinants of post-transfer profitability may be quite different in the family-to-family ownership vs. nonfamily ownership transfer conditions (i.e. whether or not the successor is related to the predecessor). Significant interaction effect is found such that the effect of strategic planning, in particular, varies depending on the nature of the transfer relationship (family to family, vs family to non-family). Other results offer mixed support for the proposed theories.

The Interaction Effect of Heuristic Representation on Initial Public Offering Anomaly: Evidence from Flipping Activity

This study examines the impact of the heuristic representation on IPO anomaly in the context of an emerging market from January 2006 to December 2016. Models consist of multiple regression has been evaluated. Our results show: firstly, the distribution of initial return, oversubscription ratio, firm age, offer period, firm size, heuristic representation, and flipping activity are positively skewed; Secondly, the oversubscription ratio has a positive relationship with flipping activity. This is because higher demand makes investors flip more to liquidate the IPO on the first trading day. In contrast, firm size has a negative relationship with flipping activity. A larger IPO firm is more stable in terms of performance, and less risky in terms of business operation; Thirdly, heuristic representation influences the relationship between oversubscription ratio and flipping activity; Lastly, this study dispels the notion that investors are active in subsequent trading but not necessarily obtain a profit from the liquidation. This study extends earlier work by examining the interaction effect of heuristic representation to the flipping activity in an emerging market

Founder Replacement and Startup Performance

We provide causal evidence that venture capitalists (VCs) improve the performance of their portfolio companies by replacing founders. Using a database of venture capital financings augmented with hand-collected founder turnover events, we exploit shocks to the supply of outside executives via 14 states’ changes to non-compete laws from 1995 to 2016. Naive regressions of startup performance on replacement suggest a negative correlation that may reflect negative selection. Indeed, instrumented regressions reverse the sign of this effect, suggesting that founder replacement instead improves performance. The evidence points to the replacement of founders as a specific mechanism by which VCs add value

Faktor dan Upaya dalam Proses Suksesi Kepemimpinan Bisnis Keluarga di PT. Tp

Keberhasilan atau kegagalan dalam proses suksesi dapat terjadi pada semua bisnis keluarga karena beberapa faktor. Tujuan penelitian ini adalah untuk mendeskripsikan factor-faktor dan upaya-upaya yang dilakukan dalam menstimulasi faktor pendukung keberhasilaan dan mengeliminasi factor-faktor kegagalan. Faktor-faktor tersebut meliputi; prosedur penyiapan, kesiapan, komu­nikasi, hubungan keluarga dan lingkungan kerja. Penelitian ini menggunakan metode kualitatif deskriptif. Hasil penelitian menunjukkan adanya prosedur yang terbuka, kesiapan yang matang, komu­nikasi yang intens dari semua pihak, hubungan keluarga yang po­­­sitif, dan lingkungan kerja yang bersahabat dengan mau mene­­rima pemimpin yang baru dapat berpotensi untuk mewu­jud­kan keberhasilan proses suksesi pada PT. TP

(WP 2011-01) It Takes Two: The Incidence and Effectiveness of co-CEOs

This study examines the phenomenon of co-CEOs within publicly traded firms. Although shared executive leadership is not widespread, it occurs within some very prominent firms. We find that co-CEOs generally complement each other in terms of educational background or executive responsibilities. Our results show that firms most likely to appoint co-CEOs have lower leverage, a more limited firm focus, less independent board structure, fewer advising directors, lower institutional ownership and greater levels of merger activity. The governance structure of co-CEO firms suggest that co-CEOships can serve as an alternative governance mechanism, with co-CEO mutual monitoring substituting for board or external monitoring and co-CEO complementary skills substituting for board advising. An event study indicates that the market reacts positively to appointments of co-CEOs while a propensity score analysis shows that the presence of co-CEOs increases firm valuation